There were 54,719 approvals in January, showing a 2% decline compared with an 11-month high recorded the previous month and marking the first time that there has been a month-on-month decrease since July.
Mortgage approvals for house purchase had been on a steady upward path since the Government’s Funding for Lending scheme, which aims to help borrowers by giving lenders access to cheap finance, was launched at the start of August.
The latest figures echo recent findings from the the Council of Mortgage Lenders (CML), with some analysts blaming the recent bad weather. The CML is still confident that activity will lift in the coming months amid better mortgage availability and a raft of lenders offering some of their lowest ever rates. Mortgage availability has increased by around one third since the Funding for Lending scheme was introduced.
Building society Nationwide also reported that house prices edged up month-on-month in both January and February this year and it said it is cautiously optimistic that activity will pick up in the months ahead.
Howard Archer, chief UK and European economist for IHS Global Insight, pointed out that despite the dip, mortgage approvals for house purchase in January were still at the second highest level for a year.
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